SEC approves company use of social media

The SEC says it’s okay for U.S. companies to use social media to announce key information, so long as investors have been alerted about which form of social media will be used.

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“Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news,” says George Canellos, Acting Director of the SEC’s Division of Enforcement.

The SEC has issued Regulation FD, which requires companies to distribute information to the general public broadly and non-exclusively. It ensures all investors gain access to material information at the same time.

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Lona Nallengara, acting director of the SEC’s Division of Corporation Finance, says, “Companies should review the Commission’s existing guidance — it is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.